UGL (UGL)

Shares in
UGL
are down about 10 per cent in 2011, slightly ahead of the broader market, and not as bad as the declines felt by some of its peers including Leighton Holdings, which has shed 24 per cent, and Downer EDI, which has slipped 14 per cent over the same period. Full-year results released on Monday, including a 9 per cent increase in profits, were well received. Born as a construction company in Perth in the 1970s, UGL has transformed itself over the subsequent decades into a diversified maintenance, facilities management and engineering and construction group, in part through a series of acquisitions. UBS initiated coverage with a “buy" rating and $15 target share price following the result, pointing to its recurring revenue streams and sound balance sheet as two encouraging factors. With a gearing ratio of about 13 per cent, the group has used a third of the leverage available to it under its current debt covenants.